Cheaper Cellphone Rates

[Klipspringer]

C

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Apparently Cell phone calls are to become cheaper/already has , I'm not clued up. something to do with interconnection rates going down , Now for something to go down , say it cost R1,50/minute it has to go down to R1,49/minute or less .It seems that , the promised reduction in cellular phone call costs isn't happening/going to happen.

This is the great misconception. I'm sure there are a few operators out there who would like you to believe that, but it's obviously not true. Although there have been some minor reductions in retail rates by the mobile operators, it's largely been window dressing if you look at the overall effect on their revenue.

What has been forced down by the Minister (and will hopefully be forced down even further by ICASA now) are mobile termination rates. These are the prices that mobile operators are PAID by other networks who want to make calls to their subscribers. As a result, their revenues have reduced sharply. Logically, what they should be doing to keep their shareholders happy is to RAISE their retail prices to make up for the losses. In Europe, this was exactly what happened under the same circumstances - it's called the waterbed effect. The South African operators are basically now too scared of the bad publicity and government if they do the same, so they're trying to pretend that they will reduce their rates.

What has happened is that Neotel and Telkom have passed on the savings that they have made (because they now pay the mobile operators less). Prices for calls from fixed lines to mobile phones have dropped sharply. The cheapest way to call a mobile phone now during peak (standard rates, not bundles) is from Neotel (R1.37 per minute), and Telkom is about 8% higher.